Ford (NYSE:F) is set to reduce production of the all-electric F-150 Lightning at its Rouge Electric Vehicle Center in Michigan, with the decision to cut one of the two production shifts. This move is aimed at aligning production with customer demand, following slower-than-expected interest in electric vehicles (EVs).
The Rouge Electric Vehicle Center has been manufacturing the F-150 Lightning since April 2022, and in 2023, Ford sold 24,000 units of the electric pickup. While this represents a 55% year-over-year increase in sales, it is a fraction of Ford’s overall F-series pickup sales, which exceeded 750,000 units.
Despite the eligibility for a $7,500 federal EV tax credit, the F-150 Lightning’s price remains higher than the $34,000 base price of its gas-powered counterpart. Ford has adjusted the price of the Lightning multiple times since its introduction in 2022.
The production reduction will impact 1,400 workers at the Rouge Electric Vehicle Center. Approximately half of these workers will be transferred to the Michigan Assembly Plant, where Ford plans to increase production of gasoline-powered Ford Bronco and Ranger models. The remaining workers will either be relocated to nearby plants or may opt for the “Special Retirement Incentive Program” by the 2023 Ford-United Auto Workers agreement.
Ford, acknowledging the challenges, highlights the need to optimize its production strategy based on market demand. The company aims to adapt to evolving trends in the automotive industry, particularly in the electric vehicle segment. The adjustment in F-150 Lightning production is a strategic move to ensure efficient resource allocation and workforce management.
Last year, sales of the Ford Bronco and Ranger experienced declines of 9.7% and 43.3%, respectively. The production facility, responsible for manufacturing both vehicles, was impacted by a six-week United Automobile Workers strike. To address this, Ford plans to add a third shift to its Michigan Assembly Plant in the summer, creating 900 new jobs and increasing production capacity for the Bronco and Ranger models.
Ford remains committed to navigating the evolving automotive landscape and adjusting its production strategies to meet changing consumer preferences. The decision to streamline F-150 Lightning production reflects a dynamic approach to the challenges and opportunities presented by the current market conditions.
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